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    3M - Muda, Mura, Muri

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    R Bharat Kumar
    This document discusses inventory as a type of waste (muda) in manufacturing. It defines inventory muda as inventory that sits unused in storage areas, taking up space and tying up cash. Holding excess inventory has direct costs like interest payments and indirect costs like storage, transportation and obsolescence. Excess inventory is often caused by overproduction, lack of process balance, unreliable suppliers or long changeover times. Methods to reduce inventory muda include balancing processes, improving changeover times, implementing kanban systems, and better demand forecasting and supplier management.

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    3M - Muda, Mura, Muri

    Uploaded by

    R Bharat Kumar
    93 views12 pages
    This document discusses inventory as a type of waste (muda) in manufacturing. It defines inventory muda as inventory that sits unused in storage areas, taking up space and tying up cash. Holding excess inventory has direct costs like interest payments and indirect costs like storage, transportation and obsolescence. Excess inventory is often caused by overproduction, lack of process balance, unreliable suppliers or long changeover times. Methods to reduce inventory muda include balancing processes, improving changeover times, implementing kanban systems, and better demand forecasting and supplier management.

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    This document discusses inventory as a type of waste (muda) in manufacturing. It defines inventory muda as inventory that sits unused in storage areas, taking up space and tying up cash. Holding excess inventory has direct costs like interest payments and indirect costs like storage, transportation and obsolescence. Excess inventory is often caused by overproduction, lack of process balance, unreliable suppliers or long changeover times. Methods to reduce inventory muda include balancing processes, improving changeover times, implementing kanban systems, and better demand forecasting and supplier management.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    93 views12 pages

    3M - Muda, Mura, Muri

    Uploaded by

    R Bharat Kumar
    This document discusses inventory as a type of waste (muda) in manufacturing. It defines inventory muda as inventory that sits unused in storage areas, taking up space and tying up cash. Holding excess inventory has direct costs like interest payments and indirect costs like storage, transportation and obsolescence. Excess inventory is often caused by overproduction, lack of process balance, unreliable suppliers or long changeover times. Methods to reduce inventory muda include balancing processes, improving changeover times, implementing kanban systems, and better demand forecasting and supplier management.

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    You are on page 1of 12

    2/7

    3M - Muda Mura Muri


    Part 4 of 4
    This article on Muda will be a 7 post series.
    CONCEPT OF MUDA
    Muda (無駄): futility; uselessness; pointlessness; waste;

    3 Categories of Activities in any operation/ process

    ❸ WORK – Operations which improve value added (assembly,


    Welding)

    ❶which
    MUDA – All things which don’t improve value added or
    aren’t needed during operation (waiting, correction,
    reaching, twisting etc) and for which customer is NOT WILLING to pay

    ❷ MUDA but Essential – Operations needed under current operative


    conditions although they don’t have value added and are essentially Muda
    (Conveyance, setup, checking etc)
    Muda is to be eliminated by identifying and eliminating
    non value added activities - more easy to identify as
    compared to Muri and Mura.
    CONCEPT OF MUDA
    3 Categories of Activities in any operation/ process

    Non-Value Added Non-Value Added


    Activities Activities (Waste)
    (Essential) 60%
    35% – Any Activity for which the
    - activity that adds no customer is NOT WILLING to
    value but is essential & pay
    cannot be eliminated due
    to technology/ legislation

    constraint. ELIMINATE

    MINIMISE
    ❶
    ❷
    ❸
    Value Value - activity that transforms material/
    Added Activities information & customerst is paying for it
    and is done right the 1 time
    OPTIMISE
    5%
    7 WASTE
    The most famous of the three evils of manufacturing is waste (muda). This is
    commonly divided into the famous seven types of waste:

    TRANSPORTATION INVENTORY MOTION

    DEFECTS
    WAITING OVERPRODUCTION OVER PROCESSING
    2/7

    INVENTORY
    INVENTORY MUDA
    Inventory Muda is inventory that is available in
    stores (Raw Material/ Purchased Material), shop
    floors (WIP- Work in progress), warehouses
    (Finished Goods) but do not work on right now. You
    paid for it, but it merely sits around, has to be maintained,

    INVENTORY transported, and uses up space

    Photo Credit - LeanOp


    EXAMPLES OF INVENTORY MUDA
    On Shopfloor
    1. In raw material store, raw materials that have been ordered in excess of customer
    requirements
    • Due to poor planning
    • Due to supplier subscribing to bigger MOQ (Minimum Order Quantity)
    • Incapable and fragile Supply chain
    • In lurch for getting Bulk Discounts
    • Long lead time of material owing to mfg process, its source of supply
    2. In between processes, inventory building up
    • In front of processes that are slower than the preceding processes.
    • Due to Big setup times resulting into bigger lots for “economy of production”.
    3. In FG, inventory can be seen building up due to
    • Poor planning/ communication from customer
    • Too much safety stock
    • Incapable in-house processes.
    Other Areas
    It is common to see Hugh piles of stationary etc. lying in office stores
    ILL EFFECTS OF INVENTORY MUDA
    The Ill Effect of Holding inventory can be classified into 3 categories:
    1. Direct Impact
    • Cash gets blocked in inventory leading to issues in working capital
    • Most business have borrowed Money, Interest amount will be charged
    resulting into hit in profits
    2. Obvious indirect Impact
    • Cost associated with transportation and movement of this inventory
    • Space required for storage of this inventory leads to space crunch for
    crucial operations
    • Cost associated with storage like cost of containers to store it in, the
    administration of keeping track of it
    • the damage and losses that occur during transportation,
    • the cost of writing off materials that become obsolete,
    • Insurance Cost.
    3. Not So Obvious Indirect Impact
    • it causes your lead times to be increased as well as your costs
    • problems being hidden away in the inventory
    CAUSES OF INVENTORY MUDA
    In accounting, inventory is seen as an asset and oftentimes suppliers give discount
    for bulk purchases. But having more inventory than necessary to sustain a steady
    flow of work can lead to problems as shared in previous slide
    Excess inventory can be caused by :
    • Overproduction
    • Inventory location and quantity not scientifically designed and calculated
    • Lack of Balance in workflow, forcing inventory built-up between processes
    • Buffer defined is greater than needed
    • Lack of proper monitoring systems
    • Production speed not aligned to demand
    • Suppliers are not reliable/ are far off
    • Long Setup Times
    • Large Batch Sizes
    • Misunderstood Customer Demand
    • Incapable Processes
    HOW TO REDUCE INVENTORY MUDA
    Some of the strategies to reduce or eliminate inventory waste includes
    1. Create a flow of material and information and eliminate or minimize reason for
    stagnation of flow
    • Make your process and machine reliable (by saying doing TPM) so that need
    for “Buffer/ Safety” inventory is eliminated
    • Balance your processes so that difference in cycle time does not necessitate
    creation of inventory
    • Move operations closer to each other and make changes to layout to make
    product flow
    2. Stop doing over production. Over production results into excess inventory.
    Kanban along with production to Takt can be tools that might be used
    3. Reduce Setup time to facilitate shorter batch production. Ultimate goal should
    be single piece flow
    4. Better planning and working with suppliers to improve their processes. Moving
    Supplier closer to your unit and assisting them for smaller lot production
    TOOLS TO REDUCE INVENTORY MUDA
    These Tools are used to reduce

    TOOL TOOL TOOL TOOL


    LINE BALANCING Inventory Muda & will be
    KANBAN discussed in subsequent posts

    SMED
    LAYOUT PLANNING
    Thank You!!!
    Journey Continues...

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